Advertisement
Advertisement

Brent Crude Oil Price Update – Needs to Hold Long-Term Fib Level at $71.51 to Sustain Upside Momentum

By:
James Hyerczyk
Published: Apr 29, 2019, 01:59 UTC

Based on last week’s close at $71.63, the direction of the July Brent crude oil futures contract this week is likely to be determined by trader reaction to the major Fibonacci level at $71.51.

Brent Crude Oil

International-benchmark Brent crude oil futures closed lower last week and nearly posted a potentially bearish closing price reversal top. Earlier in the week, the market hit a 6-month high. The rally early the week was triggered by concerns over tightening supply after the United States said it would end the waivers given to eight countries on importing Iranian crude oil. The sharp sell-off late in the week was fueled by reports of ample supply, a surge in U.S. inventories and bearish comments from President Trump.

Last week, July Brent crude oil settled at $71.63, up $0.20 or +0.28%.

We’re looking for heightened volatility this week and the possibility of a two-side trade since traders still don’t know if Saudi Arabia and its allies will fill in the shortage from the additional sanctions against Iran.

Brent Crude Oil
Weekly July Brent Crude Oil

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $74.73 will signal a resumption of the uptrend. The main trend will change to down on a move through $64.32.

The major range is $83.71 to $51.78. Its retracement zone is $71.51 to $67.75. This zone is controlling the longer-term direction of the futures contract. Holding above it will continue to give the market an upside bias. Longer-term sentiment will shift to the downside if this zone fails as support.

The short-term range is $64.32 to $74.73. Its 50% level or pivot is $69.53. This level falls inside the major retracement zone. It is controlling the short-term momentum.

The main range is $51.78 to $74.73. If the main trend changes to down then look for the selling to extend into its retracement zone at $63.26 to $60.55.

Brent Crude Oil
Weekly July Brent Crude Oil (Short-Term)

Weekly Technical Forecast

Based on last week’s close at $71.63, the direction of the July Brent crude oil futures contract this week is likely to be determined by trader reaction to the major Fibonacci level at $71.51.

Bullish Scenario

A sustained move over $71.51 will indicate the presence of buyers. Overcoming the uptrending Gann angle at $72.32 will indicate the buying is getting stronger. This move could create the upside momentum needed to challenge last week’s high at $74.73. Overtaking this level could lead to a test of the next downtrending Gann angle at $76.21.

The Gann angle at $76.21 is the trigger point for an acceleration to the upside with the next target angle coming in at 79.96.

Bearish Scenario

A sustained move under $71.51 will signal the presence of sellers. This could lead to a labored break due to a number of potential support levels. These include an uptrending Gann angle at $69.78, followed by the pivot at $69.53. Another potential support area is the uptrending Gann angle at $68.32 and the major 50% level at $67.75.

The major 50% level at $67.75 is the first trigger point for an acceleration into the next uptrending Gann angle at $66.32. This is the second trigger point for an acceleration. If it fails then look for the selling to possibly extend into the main bottom at $64.32.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement